Provision for Bad Debt and Recovery

I have never had any of my bad debt written off but when my father passed away from cancer 7 years ago some of his outstanding credit card debt was.

Just makes me think if credit card companies and other businesses have some sort of provision for bad debt. I know our family business counted on every penny we generated we didn’t have a special bad debt expense journal entry in our accounting books. Would a large accounts receivable for bad debt be considered a tax write off for a business?

When I was operating my taxi-cab business I had some bad debt write offs but it was not that much a very low profit to bad debt ratio. Bad debt recovery was on my mind but in the end having a few thousand dollars owning to me was not worth the hassle of trying to get it back but maybe I could have used it as a tax write off. When my taxi-cab business failed when I began to get tired of it I didn’t try to get my bad debt written off. I spent the next 2 years making payments out of pocket to pay off the business loans that I was given.

Maxed Out Credit Cards...Twice!

So in the pursuit of making money online over the last 10 years I have maxed my credit card twice. Online marketing is the land of high pressure time sensitive sales of guaranteed income in just a few hours! How can you not buy into that? I was a sucker for a long time falling for all the tricks but by doing so I learned a lot about online marketing and a lot about humility.

I first time I maxed out my credit card I was single and it wasn't a big deal. I just stop renting as many video games and paid more onto my credit card and even got a personal loan.

The second time I maxed out the credit card I was already with my soon to be wife. We were still in the process of getting into the financial grove of being a couple and the responsibility of that. In addition I had just moved to the city to be with here full time and I was job less! We had almost paid off the credit card and I decide it was time to make money online!

I think it took me only a few days to max out the card and I didn't make one sale! The last straw that made me realize what I had done was Google charging me $400 in ads in the span of 2 hours. My ad was show and clicked like 10,000 times but I made no sales.

I was devastated and the pain of telling my love of my life I had messed up royally still hurts to this day. I cried for a long time and she just held me. In the end Google retracted this payment because they have a guarantee that when mistakes like this happen they cover the cost. I guess their system makes errors like this now and again.

And I married this understanding woman, we made it through the hard times, and I try every day not to make the same mistakes.

Overdraft Quicksand

My credit was never good enough for me to get an overdraft on my bank account but my wife is and she does have overdraft. Feels good to have this safety net just in case but when you put yourself into a bad situation overdraft can be like quicksand.

Since we bought our new house we have had a lot of unexpected expenses so we maxed the credit cards and now our last resort is overdraft. We pay it off every 2 weeks but then we over spend going several hundred dollars under $0. Knowing that it's there is not helping us to keep our spending in check and I think in fact it is making us feel better about overspending.

The quicksand has us and it's going to take a few months before we're out!

Fast Food, Fast Money!

My wife and I just bought our first house! We are also trying to pay down credit cards that were high before we bought the house but we didn't expect the extra expenditures that come with owning a house. We had to buy tools, lawn mower, garden stuff, paint, cleaners, accessories, kitchen stuff, more furniture, and on and on.

Now we're house poor and my wife had to get a second job because I'm taking night classes to get my Degree. We have been spinning our wheels for the last 6 months trying to make good payments onto our credit cards. Unfortunately, we keep going over budget EVERY month!

With the debt reduction plan we have in place and our budget to guide us we should have one credit card almost paid off by now. Our major bad spending habit is fast food. We get so tired of cooking (we have not children yet) that we find it easy to pick something up on the way home from work. Some weeks we eat out almost every night!

We are still having trouble adapting to not eating out by buying easy to cook foods. Ok, these are not as healthy as fresh food but it is healthier than eating out. With both of us struggling to lose weight eating out just isn't an option anymore but it's a very hard habit to break being addicted to carbohydrates.

Cell Phone Hell

I try to be responsible about my cell phone bills trying my hardest not to get more than 1 payment behind. I even got mad at my family members that had their cell phones or home phones cut off because they didn't pay their bills. I don't know how someone can get a $1,000 or more racked up on the phone bill but it happens!

I split with my ex-girlfriend and she promised that she would never take advantage of her keeping the cell phone I got for her IN MY NAME!

Well she made one payment about a month after we split and it was only for half her bill. A month after that I began to get the calls from the cell company to pay MY bill. This was not fun and I did contact her, she promised to pay it off within the next month. So I gave her the benefit of the doubt but she didn't pay anything. I got the calls again.

This time I was mad, MAD! I cancelled the phone, told them to mail the bills to my new address, and I would start making payments. I was being very nice and at this point I wanted to cut all ties to my ex. I had to pay almost $500 and started making $50 payments each week. I thought all was good now.

Wrong! I got the new bill and there was $400 more in charges! She had phoned the cell company and made them reconnect the phone even though I told them NO one else had any authority to make changes to this account. The phone company took no responsibility in their wrong doing and I now had almost $900 to pay back. I'm happy to say that she was not able to reactivate that phone again.

It took me about 6 months to pay this off because I had just moved and was working crappy jobs but thankfully living with some good friends.

First Magazine Subscription

When I was 18 I decided I wanted to get my first magazine subscription problem is I didn't have any real income at the time and lived with my Dad. It's bad enough it was an adult magazine and I thought I was old enough to do such things and mature enough to pay the bills.

It was great I got my first issue and the bill. Low and behold I didn't have the money to pay the full year subscription so I figured I would just make small payments when I could. Well I couldn't even afford the small payments but I was sent my second issue. Life was great!

Then I got my first overdue notice and they stopped sending me my magazine. I figured I would still only make small payments and maybe just the amount for the magazines I already got. Well as time went on I kept forgetting about the bill because I was a stupid teenager with more important things to do.

Finally, I got mail from a strange company in the US. It was a collection agency! My very first bit of adult responsibility and now a collection agency was after me. It took me about a year to pay the bill that was only about $50. During this time I was given my first credit score thanks to my inability to be a reasonable adult and a US collection agency.

This low credit score has affected my credit for over 15 years now. My score is now getting to a respectable level but it made it very hard for me to get credit cards and bank loans for years and years.

Furniture Store Credit

I was approved for credit at the large well known furniture store here in Canada, it was awesome!

So I got a big screen 42" TV and a king sized bed! I was a bachelor at the time so both of these were important to have. The 16 months on interest no payment period went fast! I had always meant to pay it off before interest kicked in but it just didn't happen because I was working for the family business and not making any real money because the business was just paying my regular bills.

The heat was on to make my payments, and with 29.99% interest it felt like a never ending debit. It was self fueling building almost as fast as I made payments.

Even if I was one day late making a payment or they didn't register the payment I made a few days before the due date I would get a call. A few times I got behind and they called me every few days acting as if I didn't make payment arrangements with them. These calls always made me feel like dirt, like I was stealing from them or my need for food was not important. Never ever did I sense any sympathy towards me.

After moving in with my girlfriend who is now my wife, we had to deal with the same company because we didn't have any other way to get the furniture we needed. So again we went through this degrading process with this company. When we began to learn about debt reduction and budgeting we made a plan that paid off this store credit within 9 months!

Now we're using the same plan to pay down our credit cards...but this was delayed because we had to save some money to buy our new house!